National Energy & Gas Transmission examiner appointed

By Jeff Pines

Washington, March 22 - The U.S. trustee for the National Energy & Gas Transmission, Inc. Chapter 11 case appointed Daniel Scotto of Whitehall Financial Advisors LLC, as examiner on March 22.

Scotto, who founded Whitehall, has been L.F. Rothschild's director of corporate bond research and utility analyst and BNP Paribas' director of high grade research and senior utility analyst. In addition, he also helped negotiate the Long Island Power Authority's acquisition of the Long Island Lighting Co.

He was appointed because Mitsubishi Heavy Industries Ltd. filed a request for the court to appoint an examiner over concerns that company-controlled project companies that did not file for Chapter 11 might have struck foreclosure deals favoring bankers under orders from National Energy. Since the project companies did not file for Chapter 11, their actions are not otherwise being reviewed by the court, Mitsubishi said in its Sept 17 request.

As a creditor, Mitsubishi is concerned the project companies, whose debt was guaranteed by National Energy, approved deficiency amounts that "form the basis for hundreds of millions of dollars in bank creditor 'unsecured claims' in this proceeding," according to its motion.

The bank creditors also are the majority of the official committee of unsecured creditors.

The examiner will examine each of the project guarantee claims to determine if the claims are overstated. The examiner will report back by April 28, according to judge's order asking the trustee to appoint an examiner.

The appointment is subject to court's approval.

Bethesda, Md.-based National Energy filed for bankruptcy on July 8, 2003 with the U.S. Bankruptcy Court for the District of Maryland, Greenbelt Division.

The Chapter 11 case number is 03-30459.

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